Kelliher v Commissioner for Main Roads - [2013] WASC 437

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION: KELLIHER -v- COMMISSIONER FOR MAIN ROADS [2013] WASC 437

CORAM: PRITCHARD J

HEARD: 30 JULY 2013

DELIVERED : 6 DECEMBER 2013

FILE NO/S: CIV 1897 of 2007

BETWEEN: JAMES WILLIAM KELLIHER
First Plaintiff
ROBERT JOHN KELLIHER
Second Plaintiff
AND
COMMISSIONER FOR MAIN ROADS
Defendant

Catchwords:

Application for payment of costs of interlocutory application - The Court's power to award costs under s 37 of the Supreme Court Act 1935 (WA) and O 66 r 1 of the Rules of the Supreme Court 1971 (WA) - Whether either party engaged in unreasonable conduct that would warrant the making of a costs order - Whether surrender by plaintiff of part of case would warrant the making of a costs order

Legislation:

Land Administration Act 1997 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)

Result:

There be no order made as to costs

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr P G McGowan
Second Plaintiff            :     Mr P G McGowan
Defendant:     Mr K M Pettit SC

Solicitors:

First Plaintiff                :     Cornerstone Legal
Second Plaintiff            :     Cornerstone Legal
Defendant:     State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Australian Securities Commission v Aust‑Home Investments Ltd (1993) 44 FCR 194
Brickhill as Trustee for TLAJ Trust v McArthur [2013] WASC 16
Hoddinott v Willmott Forests Ltd (recs and liqs apptd) (in liq) [2012] VSC 282
McKay v Commissioner of Main Roads (No. 7) [2011] WASC 223 (S)
Naidoo v Williamson [2008] WASCA 179
Peet Ltd v Richmond [2010] VSCA 71
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin [1997] HCA 6; (1997) 186 CLR 622

PRITCHARD J: The plaintiffs and the defendant have each applied to the Court for orders for the payment of the costs of, and incidental to, an interlocutory application brought by the defendant which ultimately proved unnecessary for the Court to determine. The defendant's application was rendered redundant as a result of a decision by the plaintiffs not to pursue one aspect of a claim for compensation made in their action.
In addition, the plaintiffs seek an order that the defendant pay some of their costs of preparing for the trial of this action, which the plaintiffs claim were 'thrown away' as a result of that decision.
For the reasons outlined below, I am not persuaded that in the exercise of my discretion I should make the costs orders sought by either the plaintiffs or the defendant.
In these reasons I deal with the following matters:
1.The factual background;
2.The Court's power to award costs;
3.Why the costs orders sought by the plaintiffs should be refused;
4.Why the costs order sought by the defendant should be refused.

The factual background

(a) Contextual overview

In July 2006, the defendant acquired a portion of some land owned by the plaintiffs in the Peel region (the Land) for the purpose of the construction of the new Perth to Bunbury highway. In 2007, the plaintiffs…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] WASC 437
Decision Date: 6 DECEMBER 2013

CaseChat Overview and Summary

The case of Kelliher v Commissioner for Main Roads involved a dispute between the plaintiffs, who owned land in the Peel region, and the Commissioner for Main Roads, regarding compensation for the acquisition of their land for the construction of a new highway. The plaintiffs sought compensation for the compulsory acquisition of the land, as well as for injurious affection, severance, and betterment in respect of adjoining land. One issue that arose was whether compensation for injurious affection should be assessed as at the date of the taking of the land or as at the date of the trial. The Commissioner for Main Roads maintained that compensation should be assessed as at the date of the taking, while the plaintiffs argued for assessment as at the date of the trial.

The legal issues that the court was required to decide included whether either party had engaged in unreasonable conduct that would warrant the making of a costs order and whether the plaintiffs' surrender of part of their case would justify a costs order. The court had to consider the discretion it had to award costs under s 37 of the Supreme Court Act 1935 (WA) and O 66 r 1 of the Rules of the Supreme Court 1971 (WA). The court also had to consider whether the defendant's conduct was unreasonable and whether the plaintiffs had effectively surrendered part of their case.

The court found that the defendant's conduct was not unreasonable, as it had changed its position based on changed circumstances. The court also found that the plaintiffs had effectively surrendered part of their case by agreeing to resolve the date of assessment issue at the trial rather than as a preliminary question. The court concluded that any costs order should do justice between the parties and that, in this case, it was appropriate to refuse the plaintiffs' application for costs. The court found that the defendant's decision to bring an application for the determination of a preliminary question was not unreasonable and that the plaintiffs' surrender of part of their case justified a costs order against them. The court ordered that the plaintiffs pay the defendant's costs of the Application and the costs thrown away.

Orders

Orders of the court

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Background

Background to the litigation

The factual background In July 2006, the defendant acquired a portion of some land owned by the plaintiffs in the Peel region (the Land) for the purpose of the construction of the new Perth to Bunbury highway. In 2007, the plaintiffs commenced the present action in which they seek, amongst other things, compensation for the compulsory acquisition of the Land pursuant to s 241(2) of the Land Administration Act 1997 (WA) (the LA Act) and compensation for injurious affection, severance and betterment in respect of adjoining land owned by the plaintiff, pursuant to s 241(7) of the LA Act. An issue which arose in relation to the plaintiffs' claim for compensation for injurious affection of the adjoining land was whether that compensation was to be assessed as at the date of the taking of the Land or the date of the trial of the action (the date of assessment issue). The defendant maintained that compensation for injurious affection was to be assessed as at the date of the taking of the Land, while the plaintiffs' view was that compensation was to be assessed as at the date of the trial. In January and February 2012, the parties conferred in relation to the question whether the date of assessment issue should be resolved as a preliminary question in advance of the trial. Counsel for each of the parties held the view that it was not necessary to take such a course. At a strategic conference in March 2012, the parties advised the Court that there was no need for the date of assessment issue to be resolved as a preliminary question in advance of the trial. (One of the reasons for that approach was that the parties anticipated that the date of assessment issue might be resolved in another matter which was before the Court at that time (the Spagnolo matter)). At that stage, the parties contemplated that the expert evidence adduced at the trial of the present action would take into account the alternative bases on which the date of assessment issue might be resolved, and that that issue would be one of the issues resolved at the trial. The plaintiffs proceeded to have their expert witnesses prepare reports and those reports were served on the defendant in July 2012. In September 2012, the solicitors for the defendant wrote to the plaintiffs' solicitors advising that they were of the view that the date of assessment issue should be resolved as a preliminary question, and outlining the basis for that change in position. Later in September 2012, the plaintiffs' solicitors advised that the plaintiffs would oppose any such application for the determination of a preliminary question. In December 2012, the defendant brought an application for the determination of a preliminary question in relation to the date of assessment issue (the Application). The Application was the subject of a hearing on 13 May 2013. On 14 May 2013, I invited the parties to provide further evidence on affidavit, and submissions, in relation to the implications of dealing with the date of assessment issue as a preliminary question, as compared to the implications of not doing so. On 21 May 2013, Mr Nelson filed a supplementary affidavit which set out the extent of the increased discovery obligations that the defendant anticipated would flow from proceeding to trial on the basis of two possible dates for the assessment of compensation.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Even if there has been no determination of the merits, the Court retains its discretion to make a costs order in an appropriate case. One of the circumstances which may warrant a costs order is where a party's conduct has been so unreasonable that the other party should obtain the costs of the action.[8] That approach is reflected in O 66 r 1(2) RSC which relevantly provides:If the Court is of opinion that the conduct of a party … after the commencement of the litigation … has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the cost of an unsuccessful party either wholly or in part.[8] Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin [1997] HCA 6; (1997) 186 CLR 622, 624 (McHugh J); Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, 201 (Hill J). Another circumstance which may justify a costs order, even when there has been no determination of the merits, is where it is apparent from the orders put before the Court that one party has effectively 'surrendered'. 'In those circumstances, a cost order may be justified on the basis that success in an action usually controls the exercise of discretion in favour of a cost order, and the successful party is ordinarily entitled to a cost order.'[9][9] Re Traditional Values Management Ltd; Handberg v Dantay Pty Ltd [2012] VSC 308 [3] (Davies J); see also Peet Ltd v Richmond [2010] VSCA 71 [16] (Nettle JA), [42] (Neave JA agreeing). The overriding consideration in any given case remains, however, that any costs order should do justice between the parties. Why the costs orders sought by the plaintiffs should be refused The defendant submitted that the receipt of the plaintiffs' expert reports in July 2012 'caused the defendant to consider the ramifications of on-going discovery of documents relating to the actual application'.[10] It was also submitted that the defendant's change of position on whether there should be a preliminary determination of the date of assessment issue was based on 5 'changed circumstances'. Those were that the Spagnolo decision did not resolve the date of assessment issue, that the plaintiffs' evidence referred to evidence at three dates (namely the date of taking of the Land, the date of each expert's report and the date of the hearing), the extent of the discovery obligations had been clarified, the extent of confidentiality issues in relation to discoverable documents had been revealed, and the extent to which the trial would be shortened by a preliminary question had been clarified.[10] Written submissions at [7]. In the course of the hearing in relation to the costs of the Application, counsel for the plaintiffs made clear that the sole basis upon which the plaintiffs sought both the costs of the Application, and the costs thrown away, was unreasonable conduct on the part of the defendant. I understand the plaintiffs' case to be that the defendant's unreasonable conduct was its decision to depart from what the plaintiffs saw as an agreement reached between the parties in January 2012 that the date of assessment issue would be resolved at the trial rather than as a preliminary question.